Billionaire investor Bill Ackman, CEO of Pershing Square Capital Management, is delaying the listing of Pershing Square’s U.S. closed-end fund, Pershing Square USA Ltd. (ticker: PSUS), according to a notice on the New York Stock Exchange’s website. Previously targeting a $25 billion raise, Ackman has scaled down his goal to $2.5 billion to $4 billion, per a recent regulatory filing.
Closed-end funds offer a limited number of shares during their initial public offerings (IPOs), which then trade on market exchanges. A notable aspect of these funds is that their market price may not align with the net asset value of their shares, potentially leading to trading at a premium or discount.
In a letter dated July 24 to investors, Ackman acknowledged the transaction’s complexities, particularly given the negative trading history of similar funds and the innovative structure of PSUS. His statement underscored the challenge investors face in anticipating that this fund could trade at a premium after the IPO, a rarity among closed-end funds historically.
With Pershing Square managing $18.7 billion in assets as of June’s end—largely comprising the $15 billion Pershing Square Holdings listed in Europe—Ackman aims to introduce a similar fund on the NYSE. This move could set the stage for his management company’s IPO. Ackman’s growing social media presence, with over a million followers, adds to the strategy, targeting Main Street investors.
The fund plans to invest in 12 to 24 large-cap, investment-grade, “durable growth” North American companies. Ackman emphasized the advantage of managing permanent capital, highlighting the stability it offers compared to traditional hedge funds, where investors can withdraw anytime, necessitating continual fundraising and reassurances. Permanent capital allows a focus on long-term investments, potentially enhancing returns.
This delayed listing remains highly anticipated, with pricing likely to occur next week, pending further announcements.
Original Story https://www.cnbc.com/2024/07/26/bill-ackmans-ipo-of-pershing-square-closed-end-fund-is-postponed-nyse-says.html
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